Windows Azure: Microsoft's Foray into Cloud Computing

Faced with a sharply declining operating system market share, in order to find new market growth points, the software giant announced on Monday that it would start providing users with a new "Cloud" operating system - Azure - late next year. This new type of operating system can manage the relationship between software installed inside computers and network software, adapting to the trend where data and services are becoming increasingly centralized.

This is an entirely new operating system, a service-based operational environment, which Ozzie refers to as: "A highly scalable service platform." It will be Microsoft's most scalable system ever, helping users and businesses establish various services on the web.

The computing field is undergoing changes, shifting from standalone personal computers to a variety of network-connected devices — from smartphones to so-called netbooks or mini-notebooks. To cope with this change, enterprise users need a new operating system.

Most of the programs used by these devices are installed on remote servers rather than on the devices themselves. These remote servers are located in a large cloud, providing so-called network services to users. The types of network services vary widely, ranging from customer relationship management to Facebook games.

Sun Microsystems, IBM, Amazon, and Google are pioneers in cloud computing, and currently, they all have their own cloud computing products. Microsoft started relatively late in the field of cloud computing.

Although Microsoft continues to show strong trends in selling operating system products to enterprise users, sales of Windows Vista have stalled. Moreover, facing competition from Apple and Research in Motion companies using their self-developed software to sell more and more phones to enterprise users, the development of Microsoft's next-generation mobile smartphone software has significantly lagged behind.

However, Microsoft's new cloud operating system, Azure, may bring new opportunities for Microsoft. But many of Microsoft's competitors believe that relying solely on Azure, it will be unlikely for Microsoft to maintain its advantages in market share and profit margins in the future.

"Azure still continues Microsoft's consistent style — locking developers into Microsoft's proprietary solutions. Essentially, Microsoft hasn't grasped the true power of cloud aggregation," said Mark Benioff, CEO of Salesforce.com, a pioneer in the SaaS CRM field. "Microsoft will continue to struggle with how to deal with cloud computing because emerging cloud technology and cloud business models strike at the heart of Microsoft's monopoly."

Despite this, Microsoft has announced the beginning of a new era in operating system development, building Azure in hopes of continuing the glory of DOS and Windows operating systems from the 1980s and 1990s.

For the past three years, Azure has been designed by Ray Ozzie. Ozzie is the founder of Groove Networks, a company specializing in developing desktop software for collaborative work and communication. In 2005, Microsoft acquired the company. In 2006, Ozzie replaced Bill Gates as Microsoft's Chief Software Architect.

Ozzie stated that any programmer who misses this new Microsoft operating system platform will certainly face significant risks.

From the perspective of software developers and users, Ozzie said: "Whenever there is a major platform shift in our industry, it brings new opportunities for our application software and business."

Ozzie's comments were quite insightful, with numerous examples in the history of computer industry development. For instance, Lotus Development, where Ozzie once worked, gradually declined due to not adopting Microsoft's first-generation Windows operating system in time. This shift gave the Windows Office suite a crucial opportunity advantage and helped Microsoft eventually monopolize the word processing, spreadsheet, and other office software markets.

Although Microsoft's software business in the enterprise sector continues to grow strongly, with the advent of the era of free software and advertising-supported internet services, more and more people doubt whether Microsoft can continue to enhance its desktop computing business.

Microsoft will use Azure to coordinate the differences between traditional proprietary software and new toolsets based on Internet standards, which are widely used to develop the most popular network services. "This is the first time Microsoft has considered putting all these together," said Peter O'Kelly, senior analyst at Burton Group.

Windows Azure is a service platform provided for web application developers, including hosting plans and tools for providing management services. Clearly, Microsoft is directly targeting Amazon EC2 platform. Amitabh Srivastava, vice president of the Windows team at Microsoft, revealed that Windows Azure is currently in its early stages and will be used to build Microsoft's Live Mesh and the next generation of Live Meeting.

Windows Azure provides random computing and storage space to developers, managing, expanding, and maintaining web applications designed for developers through Microsoft data centers.

Developers can develop web applications via the existing Microsoft Visual Studio 2008, and Windows Azure supports common standards and protocols such as SOAP, REST, and XML. Windows Azure is an open platform that supports both Microsoft and non-Microsoft development languages and environments.

Currently, the version published by Microsoft is a community technology preview, lacking some elements that will soon be added. Only programs written in managed code, including .NET, can run on this system. To run native code, one must wait for the version to be released next year. Azure currently runs only on Microsoft's single data center, but next year, Microsoft will expand the scope to other data centers in the United States and even overseas. Microsoft executive Bob Muglia said that in practice, Microsoft won't deploy too many programs on it within a year, as there is still much to learn.

Although Microsoft will not launch a commercial version of Azure in the next year or few years, O'Kelly stated that some components of the Azure operating system, such as Live Services, are already being used by millions of computer users.

At the Microsoft PDC2008 conference, Microsoft only demonstrated one application developed using Azure. Sentient Software also showcased a mobile social networking application called Bluehoo. The company said that by using Microsoft-provided computing resources, Azure makes it easier to scale the Bluehoo service.

eNet Silicon Valley Dynamics